Only Congress, Not the FCC, Can Fix Net Neutrality

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John Oliver’s right about one thing: It’s time to resolve the net neutrality debate. The host of HBO’s Last Week Tonight recently urged his viewers to deluge the Federal Communications Commission with comments. But the discussion the FCC will open this week isn’t really about “net neutrality;” it’s about whether to trust the FCC with broader powers over the internet.

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About

Berin Szóka (@BerinSzoka) is president of TechFreedom, a post-partisan think tank dedicated to technology policy.


The core of net neutrality has never really been controversial. Coined in 2003 by Tim Wu, who was my internet law professor, the idea was embraced by the FCC under President George W. Bush. The FCC’s Open Internet Policy Statement of 2005 affirmed consumers’ rights to access the lawful content, services, and applications of their choice in a competitive marketplace. No one wants broadband providers blocking or throttling traffic. And ISPs have made legally enforceable promises not to do these things.

FCC chair Ajit Pai doesn’t oppose net neutrality, as Oliver claims. Pai simply rejects the broader powers the FCC has claimed in the name of net neutrality. Only Congress can put net neutrality on a sound legal footing.

The FCC’s Power Grabs

This debate exploded back in 2008. The Federal Trade Commission, America’s consumer protection agency, stood ready to sue Comcast for blocking BitTorrent traffic. But the FCC chair insisted on handling the matter. Rather than point to any particular Congressional authorization, the FCC vaguely claimed something called ancillary jurisdiction. Even staunch net neutrality supporters, deeply skeptical of the FCC chair, decried this theory as a Trojan Horse, citing an attempted copyright crackdown by the FCC in 2004.

In 2010, a federal appeals court rejected the FCC’s legal theory. The agency then issued new rules, claiming its statutory obligation in the 1996 Telecom Act to “promote broadband” as a basis for internet regulation. In 2014, a court upheld this theory. Writing in WIRED, I called it another Trojan Horse for FCC meddling in all forms of communications, not just broadband.

The same appeals court upheld the FCC’s theory but limited how far the FCC could go in one key respect: The agency proposed new rules that banned blocking and throttling outright, but also allowed paid prioritization of internet traffic if the FCC determined it was “commercially reasonable.”  

At that time, the FCC could have done what Google and Verizon proposed back in 2010: allow the ban on paid prioritization to be overridden when there’s proof that it would benefit users—say, for online gaming or video conferencing—and that it wouldn’t harm competition. That’s been a sticking point for startups worried about so-called fast lanes and slow lanes.

But that same year, John Oliver asked his viewers to deluge the FCC with comments decrying the supposed death of net neutrality. President Barack Obama jumped in, and the FCC abruptly changed course, invoking additional legal authority, known as Title II, to ban paid prioritization completely.

A highly successful lobbying campaign by activist groups and Netflix conflated Title II with strong net neutrality. This made it politically difficult for Democrats to consider Republicans’ compromise bill.

Title What?

The problem with Title II isn’t neutrality—it’s all the other stuff. In the 1970s, the FCC started to shield computing services from the heavy hand of Title II, a price-control regime imposed on Ma Bell in 1934. In 1996, Congress codified this distinction, immunizing Title I “information services” from Title II’s “common carrier” (public utility) regulation.

But Congress wasn’t clear about what fell into each bucket. Telephone-based internet services were, like telephony itself, initially subject to Title II, but cable never was. Back in the 1990s, key Democratic senators insisted Congress never intended Title II for broadband. President Bill Clinton’s FCC chair said he wouldn’t dump the “whole morass of [Title II] regulation” on cable modem services—because that would diminish competition and discourage investment and innovation in broadband networks.

The Bush-era FCC took Title II off the table. In 2015, the Obama-era FCC invoked what it claimed was Title II lite. But, critically, its selective enforcement of Title II can easily be changed by any future FCC. What’s more, the FCC did invoke Title II’s core provisions—all the FCC would need for the kind of full-blown regulation imposed on the railroads in the 1880s. You can’t have a little Title II any more than you can be a little pregnant.

What Happens Now?

Now, the FCC has proposed to revisit its earlier interpretations. That would return jurisdiction over broadband regulation (including net neutrality) to the Federal Trade Commission. The FCC could vote to do this late this year. If that happens, net neutrality won’t die, but enforcement will shift to case-by-case policing of general laws, instead of specific regulations on net neutrality. The FTC and state attorneys general have broad powers to protect consumers from deceptive or harmful practices. And, joined by the Department of Justice, they can all punish (and deter) anti-competitive conduct.

Net neutrality activists may not trust a Republican-led government to protect net neutrality, but Democratic state attorneys general will enjoy the same broad powers. And while the majority of governors are Republicans, a few activist AGs could discipline broadband providers nationwide. Just last week, New York’s attorney general sued Time Warner Cable and Charter for failing to deliver promised speeds for Netflix service.

This kind of law enforcement is what Congress had in mind back in 1996 when it declared that the internet should remain “unfettered by Federal or State regulation”—yet shouldn’t be lawless. Getting the FCC out of the internet regulation business would return us to the bipartisan “hands off the ‘net” consensus that drove more than $1.5 trillion in private broadband investment.

Resolving This Fight

Pai’s new order could come late this year, and it will likely prevail in court. But the next time a Democrat wins the White House, the FCC will invoke Title II again, putting us right back where we are today.

Meanwhile, litigation may continue. Last year, my think tank, TechFreedom, led a group of Silicon Valley entrepreneurs in challenging Title II. Last fall the FCC won, and earlier this month the full DC Circuit declined to reconsider the issue, though two judges agreed with us. If the Supreme Court takes the case this fall, its ruling, due next spring, could herald a broader shift against deference to bureaucracy—something Trump’s critics should welcome.

The Supreme Court might decline to take the case simply because the FCC has already reopened the issue. Unfortunately, a clear decision from the high court could be the one thing that could force legislative compromise. Ultimately, though, the solution is clear: legislation. Really, it’s the failure of both parties to resolve relatively minor disagreements about how to police net neutrality that led the FCC to make broad claims of power over the internet.

In 2006, House Republicans passed legislation empowering the FCC to enforce the Open Internet Policy Statement, but the bill died in the Senate. In 2010, a court blocked the FCC’s subsequent attempt to enforce the policy statement. Democrats wanted legislation, and Google and Verizon even negotiated a deal. Congressional Republicans wanted to negotiate after retaking the House. By then, the FCC had already issued its first net neutrality rules, which partially failed in court in 2014. The following year, Republicans offered a deal, and Democrats have stonewalled since.

Lawmakers should enshrine rules against blocking and throttling, enforced by either the FCC or the FTC, and deny the FCC a blank check over the internet. Until Congress acts, telecom Groundhog Day will keep replaying over and over and over.

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